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Friday, November 30, 2007

HOW I LOST THREE MILLION DOLLARS: an Ebook

HOW I LOST THREE MILLION DOLLARS

The following is an excerpt from the INTRODUCTION of my book on: “HOW I LOST THREE MILLION DOLLARS IN THE STOCK MARKET! – A PRIMER ON WHAT NOT TO DO and A GUIDE TO RECOVERING FROM DISASTER.”

This is a book that everyone intending to invest in the stock market ought to read. It is about potential and real problems existing in market investing. It is also a book for individuals who have lost significant amounts of capital, and how they might survive the experience

This book is available as an EBOOK in the ORDER ONLINE link on our web site: www.drtauraso.com.

INTRODUCTION

It was one fantastic ride, and this is one hell of a story! Many have written of how they made millions in the stock market. We’ve spoken with friends who have told us how they bought a stock and, in a short period of time, sold it at a big profit – how they made “a killing” in the stock market. Everyone is so willing to tell friends and others how well s/he scored.

When was the last time and how often has someone told you of a stock market loss? Individuals do not usually share with others their failures. It is human nature and a very natural tendency to want to appear smart and intelligent and to brag about success. We all want to feel important and successful. Perhaps, our friends and acquaintances will like us more, if we were smart and intelligent. But, of course, we learn over time and with a certain degree of maturity that our true friends will love us even if we are dumb and stupid. I am reminded recently by my four year old daughter who frequently tells me: “It’s O.K. daddy. You don’t have to change. I love you just the way you are.” After all that is said and done, we learn that, even though we may be knowledgeable or have a keen aptitude in one particular area or subject, we cannot be expected to know everything about everything. As Reverend Dick Batzler, the co-author of two of our previous books, reminds me that no one person can know everything about any single thing.

The stock market is a prime example. How can we expect anyone to know everything about a particular company which issues shares? Consequently, how can we believe analysts? Even though they may speak authoritatively, do they really know everything about a company they study? Even though we tend to want to believe analysts, can they really know? How can they when, on occasion, the CEO of a company doesn’t know? Often CEO’S buy shares of their own company, and the shares subsequently plummet. Are we to assume that the CEO who should know more his company bought the shares because he expected the stock to tumble? I think not.

Besides, analysts have their own biases about companies they follow. Additionally, analysts work for brokerage firms which may have their own particular agenda and ulterior motives for influencing a stock. Don’t think for a moment that the fire wall which is supposed to exist between the analyst and traders within a brokerage firm actually exists. From direct personal experiences with analysts and traders, I can state that this supposed fire wall does not exist in most cases.. Can anyone expect an analyst not to share his thoughts with friends at the local pub after the end of a long day at the office? Let us not be naive. Several years ago I discussed with an analyst the basis of his positive prediction on CDT (Colonial Data), a company which made caller ID’s. This analyst didn’t have a clue. I wish I had called him before I lost so much money on my very bad investment in CDT. I will describe this in more detail later in the book.

My point: Recognize who knows and who does not know. When you personally lack critical knowledge about a particular company delay investing until you do.

I am writing this book to share with you my very personal experience with the hope that you might learn from my mistakes. In the upcoming chapters, I will attempt to

1. Tell you the story of my investment mistakes.

2. Identify the financial and personal implications of those mistakes.

3. Describe how I, with the help of my immediate family, coped with the loss.

4. Draw lessons learned from the experience on investing.

5. Provide a set of principles for coping with any kind of personal disaster.

My mistakes are not unique. What may be unique is my willingness to share them with others. And so, in this book I am going to describe a roller coaster ride, one like I have never experienced before and which I hope never to experience again, and one, I hope, you, the reader, will never encounter. For the devastation I experienced in my personal life I would wish on no one.

On the title page, I purposely listed my education degrees, but humbly add that my extensive education and my previous experiences did not help me one bit in dealing with what I was to experience in investing. Actually, my education probably contributed to my inflated ego which impacted negatively on my stock market performance.

In this book, I am sharing many things not yet shared with anyone, not even my most immediate family, probably due to my embarrassment for having been so incredibly dumb!”

nicola michael c. Tauraso, M.D.
Director, Tauraso Medical Clinic
www.drtauraso.com

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